Question
You've been using a price-weighted index to track the stocks below. What would be the divisor if after the market closed on time=1, PQR did
You've been using a price-weighted index to track the stocks below.
What would be the divisor if after the market closed on time=1, PQR did a 2:1 stock split?
| Stock | Price, t=0 | Price, t=1 | Shares (million) |
| ABC | 95 | 97 | 100 |
| DEF | 45 | 45 | 500 |
| TAKE NOTE | 23 | 22 | 1,200 |
| JKL | 28 | 27 | 450 |
| MNO | 9 | 11 | 600 |
| PQR | 175 | 185 | 950 |
Step by Step Solution
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Step: 1
To calculate the divisor of a priceweighted index we need to sum ...
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Fundamentals Of Investing
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
14th Edition
0135175216, 978-0135175217
